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Cheapskate has tips for saving $20,000 a year

  • Story Highlights
  • Author Jeff Yeager says radical changes can lead to big savings
  • Lose your cell phone and give up second or third car, Yeager says
  • Families spend more than 40% of budget on eating out, so cook at home, he says
  • Quit shopping for new clothes, and have kids live at home while at college, he says
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(CNN) -- Jeff Yeager says the economic downturn is an opportunity for people to simplify their lives and be content with less.

More than 40 percent of the average household food budget is spent on eating out, says Jeff Yeager.

More than 40 percent of the average household food budget is spent on eating out, says Jeff Yeager.

The author of "The Ultimate Cheapskate's Road Map to True Riches" has some ideas for saving $20,000 to $30,000 a year. The savings don't necessarily require sacrifices, he says, but rather choices that can lead to greater happiness.

Yeager talked with Heidi Collins on Tuesday on "CNN Newsroom." A transcript of their conversation follows.

Heidi Collins: How did you become a cheapskate, if you will?

Jeff Yeager: Well, you know, I'm about 50 years old. I grew up in the Midwest, and back then, spending money was really a last resort. We led sort of a simpler life, and I think, in a lot of ways, happier, Heidi. And that's really what I write about is, maybe there's a silver lining to this economic downturn. Maybe we can simplify our lives, be content with less and actually enjoy life more.

Collins: All right. As a fellow Midwesterner, I share your cheapskate thoughts already.

Yeager: You are a sister of the cheaphood. I knew it, Heidi.

Collins: Well, hey. I do wonder, though, as you've gone through this process, if you will, if you become the ultimate cheapskate, are you noticing now a lot more people kind of joining your club?

Yeager: You know, they are. And again, I don't really talk about a life of sacrifice. I talk about a life of choices and how, in many instances, less can be more. Video Watch Jeff Yeager explain his savings suggestions »

You know, in this economy, we hear a lot of stories about how to get more stuff for 20 percent less. I'm not saying that's unimportant. But maybe we're missing the real point. The secret to the time is being content with less.

Collins: OK. Wow. I like the way you talk. All right, so let's get to these five things, because that's what everybody really wants to hear about. Specifically, what they can do. And again, this is in order to save 20,000 to $30,000 a year. Really?

Yeager: If these things apply to your family.

Collins: OK.

Yeager: And they are -- let me say in advance -- these are some fairly radical changes. But, again, it's probably not about sacrifice. It's about changing your life and maybe in the end being happier.

Collins: OK. Well, very good. First thing you say, give up your cell phone.

Yeager: Give up the cellulite life. I will use myself as a poster child. You know, I have a fairly successful career, a very happy life. I've never owned a cell phone, and nothing awful has ever happened.

Collins: Now, wait a minute. I've got to push back for a second, because a lot of people will tell you you can be happier with a cell phone because you're out of the office and you're with your family more, still able to still do business.

Yeager: We can debate all that, but 10 or 15 years ago, none of us had it, and nothing awful happened. It seemed to me we were really quite happy. Average cell phone plan costs about $100 a month. There's an interesting article in the recent Christian Science Monitor that shows the actual cost of using a cell phone could be more than $3 a minute by time you factor in unused minutes and so on.

Collins: Wow. All right. You say you might not need that second car and certainly not the third?

Yeager: Americans own about 2½ cars per family. Can you give up one? The Auto Club says it costs about, on average, $1 a mile to drive a car by the time you factor in the cost of the car, depreciation and so on. So, you could easily be talking about $5,000 to $10,000 savings by sharing the remaining car that you have, using public transportation and so on.

Collins: OK. Give up meals prepared outside your home. Quit going out for meals no matter what, if it's just a salad or a fancy fancy dinner?

Yeager: More than 40 percent of the average American family household food budget is spent on meals prepared outside the home. You can cut that by 80 percent by cooking those same meals at home and you know, maybe recapture some family time around the dinner table.

Collins: Yes, there would be people who would argue with you about that, though, too, because our culture is just so socially oriented to food. Every dinner, every business meeting, every lunch.

Yeager: We're too busy to cook because we're too busy earning the money to spend it by dining out.

Collins: Yes, yes. All right, you also say quit shopping for new clothes.

Yeager: Yes. Here again, it's what's good for your pocketbook and good for the environment. Less than 2 percent of clothes that we throw away in America are worn out. The average family spends about $1,800 on clothing. Certainly most of us have more than enough stuff in our closet that we could go six months, even a year without buying new clothes.

Collins: Yes, and then maybe just get it tailored or updated or something. Accessorize, I don't know, right?

Yeager: And again, less than 2 percent of the clothes we throw away are worn out. That's a waste of the Earth's resources.

Collins: All right. And finally, give up college room and board. You want the kids to live at home forever?

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Yeager: This is a big one, you know? Back in my day, if you have a child in school, consider having them live at home while they go to school. It's been a huge generational shift.

Back in my days, lots of people, including myself, lived at home when we went to college. Therefore, we didn't take out any college student loans. Now, of course, most kids go away to school, take out student loans. When they graduate, what do they do? They move back home with mom and dad! Let's skip the money step!

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